Monday, March 28, 2011

Three months ago, there was some confusion when SocGen's Dylan Grice, one of the brightest big picture strategists out there, released a report profiling the long-term real return on commodities(which was zero), leading some to speculate he was bearish on gold and/or other precious metals. Today, Grice puts the matter to rest with his latest Popular Delusions piece: "Why this commodity specific value investor likes gold." PTo wit: "In the hard sciences knowledge builds cumulatively. It propels the relentless growth in man’s ability to do more with less, which makes commodities such a lousy investment in the long term. Yet in the realm of social decision-making mankind is a fool, unable to learn the wisdom of posterity and doomed to repeat its mistakes: the first credit crunch occurred in the Rome of 33AD and the ancient Greeks lived with high inflation. Confidence in central bankers’ ability to learn from past inflation is as likely to be misplaced as it was in their ability to learn from past credit booms. unable to learn the wisdom of posterity and doomed to repeat its mistakes: the first credit crunch occurred in the Rome of 33AD and the ancient Greeks lived with high inflation. Confidence in central bankers’ ability to learn from past inflation is as likely to be misplaced as it was in their ability to learn from past credit booms. Gold remains the cleanest insurance against such overconfidence." And confirming gold's very unique position in the investment pyramid, Grice's conclusion borders on the ontological: "Shorting mankind’s ingenuity isn’t a smart thing to do. But ingenuity isn’t wisdom. And shorting mankind’s ability to absorb wisdom … well, aren’t you silly if you don’t? With ess of the technological risk you’re taking when you buy any other part of the commodities complex, gold is the oldest, purest and simplest way." It appears ever more are starting to agree with this perspective.

In late 2010, several organizations with mysterious names made impressive claims on the world’s attention. During a two-day period in the first week of November, more than a dozen parcel bombs arrived at embassies in Athens and at the offices of leading politicians in three European cities. Only one exploded, burning a mail handler, but European capitals went on high alert, and Only one exploded, burning a mail handler, but European capitals went on high alert, and international mail to and from Greece was halted for 48 hours. Police soon arrested two suspects who were identified as members of a terrorist group called the Conspiracy of Fire Nuclei, with more to follow in the ensuing weeks. In early December, an organization calling itself Anonymous launched disabling attacks on the websites of corporations that had ceased facilitating donations to the whistleblower group WikiLeaks. For the second time in a year, Anonymous slowed down or took offline the likes of Visa Bank of America, PayPal, and Amazon, and even the sites of some institutions and public figures such as Connecticut Senator Joseph Lieberman, who had come out strongly against WikiLeaks On December 23, two mail bombs exploded less than three hours apart, seriously injuring employees at the Swiss and Chilean embassies in Rome. The Informal Federation of Anarchists claimed responsibility and vowed future attacks to “destroy the systems of domination.” These real-world and cyberspace groups have more in common than names seemingly lifted from comic books. They are anarchists, and the headline-grabbing attacks at the end of last year are only part of a larger recent anarchist trend. According to the European police office, Europol“Spain, Greece, and Italy reported a total of 40 attacks by left-wing and anarchist groups for 2009. This constitutes an increase of 43 percent compared to 2008; the number of attacks more than doubled since 2007.” The numbers didn’t include cyberattacks, and new numbers from 2010 aren’t n yet—but they are certain to show another spike.

Saturday, March 26, 2011

Each day at the stricken Fukushima power plant seems to bring a new piece of troubling news—today, reports surfaced that three workers at the Fukushima plant had been hospitalized after radiation levels reported at the plant spiked to "10,000 times above normal." There were also reports that the No. 3 reactor vessel had been damaged, which if true would result in a serious leak of radiation at the only reactor at the site that contains the especially-toxic MOX fuel. But like so much at Fukushima, reliable information is difficult to come by (more on that later). So consider this a summary of what we know for sure • According to the IAEA, the three hospitalized workers were laying cable for the Unit 3 reactor when radioactivity was discovered on their feet and legs. An IAEA release states that the workers "were washed in the attempt to remove radioactivity, but since there was a possibility of Beta-ray burning of the skin, [the workers] were taken to the Fukushima University Hospital for examination and then transferred to Japan's National Institute of Radiological Sciences for further examination. They are expected to be monitored for around four days. It is thought that the workers ignored their dosimeters' alarm believing it to be to be false and continued working with their feet in contaminated water."

Thursday, March 24, 2011

Just when housing-watchers thought the industry couldn’t get any worse, it did. February turned out to be one of the weakest months ever for the U.S. housing sector. Starts, permits, and sales of existing homes all plunged in the month. The latest downbeat news was Wednesday’s report of a 16.9% freefall in new-home sales. Those sales are at their lowest since records began in 1963 — despite the fact that the U.S. population is 122 million residents larger than 48 years ago. Housing has been a large beneficiary of government-stimulus efforts. Yet, the sector remains an intractable foe for policymakers. While the U.S. economy can grow without housing, a recovering housing sector would shift growth to a higher pace that would boost labor markets and lift confidence.

Wednesday, March 23, 2011

Maybe I missed something, but wasn't that The Constitution of the United States of America that we just laid to rest this weekend? It was buried in a private ceremony by Mr. Barack Obama of Chicago as he silently signed America on to the One World Government some of us have been worried about for decades. Look at it this way: Where did Mr. Obama get the authority to commit United States forces to war in Libya? There was no declaration of war. There was no authorizing resolution by Congress allowing money to be spent on a war against Col. Gaddafi. As far as I know, there was no meeting of Mr. Obama and top leaders of Congress to discuss the subject in even rough form, let alone detail. There was no lengthy buildup in which the Congress was "allowed" to express the people's opinion on whether we want to be in a third concurrent war. There was just a vote by the United Nations Security Council, a very far from unanimous vote, and suddenly, the President's Secretary of State, Mrs. Hillary Rodham Clinton, solemnly announced that we were at war.

Monday, March 21, 2011

While the world has been transfixed with Japan, Europe has been struggling to avoid another financia crisis. On any Richter scale of economic threats, this may ultimately count more than Japan’s grim tragedy. One reason is size. Europe represents about 20 percent of the world economy; Japan’s share is about 6 percent. Another is that Japan may recover faster than is now imagined; that happened after the 1995 Kobe earthquake. But it’s hard to discuss the “world economic crisis” in the past tense as long as Europe’s debt problem festers—and it does. Banks could suffer huge losses on their bond portfolios; investors could panic and dump all European bonds; Europe and the world could relapse into recession. Unfortunately, the odds of success are no better than 50–50

Sunday, March 20, 2011

The Libyan war has now begun. It pits a coalition of European powers plus the United States, a handful of Arab states and rebels in Libya against the Libyan government. The long-term goal unspoken but well understood, it is regime change — displacing the government of Libyan leader Moammar Gadhafi and replacing it with a new regime built around the rebels. The mission is clearer than the strategy, and that strategy can’t be figured out from the first moves The strategy might be the imposition of a no-fly zone and attacks against Libya’s command-and-control centers, or these two plus direct ground attacks on Gadhafi’s forces. These could also be combined with an invasion and occupation of Libya. The question, therefore, is not the mission but the strategy to be pursued. How far is the coalition or at least some of its members, prepared to go to effect regime change and manage the consequences following regime change? How many resources are they prepared to provide and how long are they prepared to fight? It should be remembered that in Iraq and Afghanistan the occupation became the heart of the war, and regime change was merely the opening act. It is possible that the coalition partners haven’t decided on the strategy yet, or may not be in agreement. Let’s therefore consider the first phases of the war, regardless of how far they are prepared to go in pursuit of the mission. Like previous wars since 1991, this war began with a very public buildup in which the coalition partners negotiated the basic framework, sought international support and authorization from multinational organizations and mobilized forces. This was done quite publicly because the cost of secrecy (time and possible failure) was not worth what was to be gained: surprise. Surprise matters when the enemy can mobilize resistance. Gadhafi was trapped and has limited military capabilities, so secrecy was unnecessary.

Saturday, March 19, 2011

Even though last night's G7 Yen intervention still has no name, it likely will very shortly. After all, key previous global currency interventions have received names according to where they took place, notable ones being the Plaza Accord from 1985 which took place in the Plaza hotel in New York in 1985, which was supposed to depreciate the dollar against the Yen (in essence the opposite of what happened last night), and the Louvre Accord from 1987 which was the aftermath of the of what happened last night), and the Louvre Accord from 1987 which was the aftermath of the Plaza accord which worked so well two year later the central powers met again to halt the ongoing dollar depreciation (primarily against the Yen and the Mark). So how successful have these operations been historically? Well, when it comes to killing the dollar (Plaza) the success rate was stunning. So stunning in fact that as noted, another accord had to be implemented to halt the $ decline. That one did not work out so well: in fact following the Louvre Accord the dollar continued its depreciation (primarily against the Yen and the Mark). So how successful have these operations been historically? Well, when it comes to killing the dollar (Plaza) the success rate was stunning. So stunning in fact that as noted, another accord had to be implemented to halt the $ decline. That one did not work out so well: in fact following the Louvre Accord the dollar continued to decline for another 2 years! So if last night's attempt to strengthen the dollar (weaken the yen) is to be judged by historical precedent, the half life of the G7 intervention may be extremely short ived.

Thursday, March 17, 2011

Rand Paul (R-Ky.) took an unusual path to his seat in the United States Senate: Though his father, the libertarian Rep. Ron Paul (R-Texas), has spent decades in office, Rand Paul had never previously held public office before winning in 2010. Thr ...

Wednesday, March 16, 2011

HSBC said the pattern after the 1987 crash, the 1998 Asia crisis, and Lehman's collapse, was that Japanese repatriation kicked in violently with a lag of a week. The impact may be greater this time given the trauma, and power-rationing as 11 nuclear reactors are shut down."This overseas wealth is like a crisis fund: this is what it is for," said Mr Jeremy Warner. The sudden snap back in capital flows vastly outweighs the global impact of lost output, though that too is significant given plant closures by Toyota and others. HSBC said appetite for "Uridashi" bonds of countries such as Brazil South Africa, and Australia has "collapsed", cutting off a key source of fresh funding. The bigger effect is liquidation of global assets built up during the "carry trade", when Japan's insurers, funds and famed housewives ("Mrs Watanabe") fled zero rates to chase yield abroad. These assets include UK equities, US municipal bonds and commodity funds. This is why an earthquake in a region covering 6pc of Japan's economy– or less than 0.5pc of global output – has set off a global rout.

Tuesday, March 15, 2011

The giddy prospect of a third revolution in the Arab world, with Libya swiftly following Tunisia and Egypt into a brave new democratic era, is fading from view. democratic era, is fading from view. The growing military and diplomatic deadlock, inside and outside the country, suggest efforts to topple Muammar Gaddafi could fail, at least in the short term. His survival may, in turn, mark the beginning of the end of the Arab world revolt. In spite of aerial bombing and ground skirmishes, fighting between pro-Gaddafi forces and opposition groups remains sporadic and undirected. Since the rebels seized control of Benghazi, most of eastern Libya and towns closer to Tripoli, their uncoordinated advance has stalled. Talk of a grand march on the capital remains just that -- talk. Gaddafi is strengthening his grip on Tripoli, partly by terrorising its citizens. But his efforts to retake opposition-held towns, notably Brega, have also been inconclusive. Regime air attacks appear half-hearted and largely inaccurate.

Nearly six months after banks were caught rubber stamping foreclosures and wrongly evicting families from their homes--a scandal since dubbed "robo-gate"--state attorneys general have indicated that an agreement on restitution could be near. But a devil lurking in the details of the settlement agreement with the major mortgage servicers could make a housing recovery much further off than it needs to be. Earlier this month the state regulators, in association with federal regulators, outlined in pinprick detail how they want the mortgage service industry to be run. From how to handle foreclosure notifications to letting the Consumer Financial Protection Bureau (CFPB) review economic models for determining the value of a home, a 27-page proposed set of standards would have regulators micromanaging the entire servicing industry. Not exactly inspiration for investors to jump back into the housing game.

At worst, forecasts from some economists suggest the world's third largest economy is in danger of slipping back into recession.

The hit to growth from Japan's worst crisis since World War 2 is likely to exceed that of the 1995 Kobe earthquake, when industrial output fell but overall output remained strong, analysts said -- a downgrade from their first estimates after Japan was hit on Friday by its largest earthquake on record.

This time the yen is stronger, hampering exports, and Japan's debts -- twice the size of the $5 trillion economy -- are much bigger. It also faces a major power problem.

Rolling power blackouts begin on Monday, which will lower production. Car and semiconductor factories and oil refineries in the north-east region are closed. And Japan may raise taxes to pay for relief work, reducing consumer spending.

Japanese automakers, electronics firms and oil refiners shut key factories after a massive earthquake and tsunami struck the northeast coast, underscoring the challenge facing the government as it rushes to limit the economic blow. Electronics giant Sony Corp has suspended operations at eight factories including one making optical film that was flooded by the tsunami triggered by Friday's 8.9-magnitude quake. Nissan Motor halted output at all four of its domestic assembly factories and said restarting them could Motor halted output at all four of its domestic assembly factories and said restarting them could depend on whether it can get parts. These are just two in a long list of companies unsure of how quickly they can get their plants back up and running. The widespread damage to infrastructure as well as power rationing after an accident at a nuclear plant could also hamper efforts to resume shipments, even if factory equipment is intact. Experts say Japan's economy will suffer only a temporary setback from the quake and could bounce back in a matter of months once spending on the rebuilding efforts starts to kick in But major technology and auto exporters are expected to be among the hardest hit shares when financial markets open on Monday, reflecting worries over the potential disruption to output and pressure on profits over the short-term. Construction firms, which will benefit from the rebuilding pressure on profits over the short-term. Construction firms, which will benefit from the rebuilding are set to gain.

Sunday, March 13, 2011

Faced with financial turmoil that has resisted every emergency fix the European Union has adopted, European leaders are considering a radical step: giving up some of their independence to set domestic economic policies and cutting back many of the wage and welfare benefits that have defined the region’s politics for decades. In return, the European Union would provide funds to shore up the weakest member states, including Portugal, Greece and Spain.

The proposals, originally pressed by the newly assertive German chancellor, will be debated Friday in what is expected to be a contentious session of the leaders of the 17 countries that use the euro.

Germany is calling for several measures: raising retirement ages to reduce the burden on pension funds, ending the linking of wages to increases in the cost of living, committing to debt reduction and submitting to a level of budget scrutiny that was until recently considered anathema — and is still viewed by many as a step too far.

The gap between pensions in the public and private sectors is now so huge that even the Labour Party recognises that something has to be done to diminish it. Here's an illustration. If you have been employed by the state for most of your career, you will retire with a guaranteed pension of two thirds of your final salary. So a middle-ranking civil servant retiring on a salary of, say, £60,000 will receive an annual payment – for the rest of his life – of £40,000. To achieve that sort of income, someone who has worked in the private sector would have to amass savings in his personal pension fund of well over £1 million: an impossible amount. someone who has worked in the private sector would have to amass savings in his persona pension fund of well over £1 million: an impossible amount. Defenders of the existing system point out that the typical pension for local government employees s a mere £3,000 a year, or £4,000 for those in the NHS. But compare that with the private sector, is a mere £3,000 a year, or £4,000 for those in the NHS. But compare that with the private sector, where between 10 and 15 million workers have no occupational pension at all, and won't receive anything above the minimum state pension. Furthermore, to get a pension of £3,000 a year in most private schemes, you have to have saved a "pension pot" of around £80,000. Given the fees that you will have been charged by the pensions industry for investing that money as you saved it, you will have to put away much more – perhaps 25 per cent more. And there's no guarantee, at the end of the process, that you will have managed to secure yourself that income: if you are unlucky enough to retire just after the stock market has fallen significantly, or interest rates have gone down, you may find what that you have will only buy you an income of £2,000 or less

Saturday, March 12, 2011

The yield on Portuguese five-year debt hit a new high of 7.99pc amid mounting speculation that it also rose, making it more expensive for them to borrow. The euro has been falling against the dollar on growing doubts that leaders can bridge differences on how to solve the region's fiscal woes In a last-ditch attempt to convince investors its finances are sustainable, on Friday Portugal announced new spending cuts worth 0.8pc of GDP this year and structural reforms to push its deficit down faster. The measures include cuts in spending on social welfare and infrastructure. Changes to labour market rules are also planned, including a reduction in redundancy payments European Monetary Affairs Commissioner Olli Rehn welcomed the "clear and important" steps.

Thursday, March 10, 2011

The world's largest bond fund has gone ultra bearish on the United States, dumping all of ultra bearish on the United States, dumping all of Link this ultra bearish on the United States, dumping all of its U.S. government-related debt holdings. its U.S. government-related debt holdings. digg The move by Bill Gross's $236.9 billion PIMCO Total Return fund Emai completed last month comes in the wake of a vicious Treasury market Print sell-off and just days after he questioned who will buy Treasuries once Print sell-off and just days after he questioned who will buy Treasuries once the Federal Reserve halts its latest round of bond purchases in June. the Federal Reserve halts its latest round of bond purchases in June. Related Topics Gross, who also helps oversee a $1.1 trillion investment portfolio as Personal Finance PIMCO's co-chief investment officer, has repeatedly warned against U.S. deficit spending and its inflationary impact, which undermine the value deficit spending and its inflationary impact, which undermine the value Stocks of government debt and push up yields as investors demand more Stocks of government debt and push up yields as investors demand more of government debt and push up yields as investors demand more PIMCO Total Return compensation for risk PIMCO Total Return compensation for risk Fund Fund PTTRX.O Over the last five months, worries over the ballooning U.S. budget gap PTTRX.O Over the last five months, worries over the ballooning U.S. budget gap $10.90 +0.03 +0.28% estimated at $1.645 trillion for 2011, political stalemate in Washington +0.03 +0.28% estimated at $1.645 trillion for 2011, political stalemate in Washington 03/09/2011 over how to narrow it and inflationary fears have all contributed to a 03/09/2011 over how to narrow it and inflationary fears have all contributed to a steep sell-off in Treasuries. The benchmark 10-year note has seen its yield, which moves nversely to price, rise more than one percentage point since early October to 3.46 percent by Wednesday's close. Gross expects further carnage. Just last week, he told Reuters Insider that a 4.0 percent yield for 10-year notes is a "rational expectation" if the Fed "disappears as the buyer of last resort."

Tuesday, March 8, 2011

In the fitful civil war that has begun in eastern Libya, the rebels suffered their first big setback today at the hands of Muammar Qaddafi’s forces. After seizing the coastal oil towns of Brega and Ras Lanuf—and downing a fighter jet yesterday—the rebels Saturday night believed themselves to be on the road to victory. This morning, they pushed on, attempting to move into Bin Jawad, the next town to the west.

They had entered Bin Jawad Saturday, but had found it empty, and had left it unoccupied. Sunday, however, they encountered serious resistance, and after an all-day battle involving as many retreats—perhaps ten—as advances, they had lost Bin Jawad. By sundown, six men had died in the rearguard hospital at Ras Lanuf, amid scenes of deep emotion, and about seventy were wounded. The doctors, volunteers who had rushed in from Benghazi last night, said that they expected more of them to die. Two reporters—a Frenchman and an American—were shot as well, but only wounded slightly, with leg wounds from bullets.

For me, and for several colleagues, the morning began with an aerial bombardment at the fighter-crowded crossroads outside Ras Lanuf, where we had spent the night. We were a few hundred yards away when a jet dove, and the bomb hit—a dud, evidently, for there was a great cloud of dirt and dust, but no fireball, and, thankfully, no casualties, so far as we knew. We then advanced in several cars towards Bin Jawad amid a pack of technical vehicles and jeeps and pickups driven at high speeds by the rebel fighters, who goaded one another along with calls of “Allahu Akbar” and victory signs. Five miles from the town, a helicopter appeared in the sky, provoking panic and headlong flight back toward the Ras Lanuf intersection, where the fighters began opening up with their anti-aircraft batteries—there, they pointed, was the helicopter. It had held its distance, however, and flew high and seemed to be hugging the coast, perhaps a mile or two away. It did not fire.

Col. Moammar Gadhafi's inner circle is debating whether the man in charge of Libya since 1969 should remain in power or relinquish his role, as his government invited rebels and triba eaders to negotiate a political solution and Western nations took steps to prepare for a possible military intervention

Monday, March 7, 2011

The demarche is reckless, politically-motivated, and risks causing yet another spasm of the EMU debt crisis. If recovery proves to be more fragile than it looks – vulnerable to a fiscal squeeze in the West and a credit squeeze in the East – this ECB error will have globa ramifications The ECB's governors might usefully study and the Effects of Oil Price Shocks, a seminal work in 1997 by a Professor Ben Bernanke of Princeton. The reason why such shocks often lead to slumps is because policymakers make a hash of it. "The majority of the impact of an oi price shock on the real economy is attributable to the central bank’s response, not the inflationary pressures engendered by the shock,” wrote Bernanke No doubt ECB governors need to prove their hawkishness after Bundesbank chief Axel Weber walked out of the Eurotower in disgust, more or less stating that he did not wish to take over a body that had departed so far from orthodoxy, and succumbed to political pressure by purchasing the bonds of bankrupt states They are right to be worried. The euro lives or dies on German sufferance. The unwritten contract of Maastricht is that EMU must be run on German terms, with a German veto over monetary policy. This contract is being tested.

Any Egyptian involvement in Libya has to be handled very carefully. While the two countries fought a three day war in 1977, the real cause of tension is the fact that for thousands of years most of Libya was considered part of Egypt. Given the fact that Libya has all that oil, and less than a tenth of the population of Egypt, well then, you can figure out the rest. But for the moment, everyone is a revolutionary brother. At least for as long as the moment lasts, then history takes over.

Sunday, March 6, 2011

Last June, the Government temporarily side-stepped the political andmine that is public sector pensions by asking Lord Hutton to make some recommendations for reform. His report will be published next ISA fund superma Thursday, thereby handing back to the Government not only the ISA fund superma Thursday, thereby handing back to the Government not only the responsibility, but also what may become the political hot potato of 2011. 2011. Lord Hutton’s direction of travel has been evident for some time, not east because his choices are so limited. With the public sector concurrently facing a pay freeze, the risk of job losses and rising taxes, concurrently facing a pay freeze, the risk of job losses and rising taxes, Find an Independ a sharp reduction in the quality of pension provision risks serious Find an Independ a sharp reduction in the quality of pension provision risks serious financial adviser financial adviser union-inspired disruption. Indeed, pensions could be some union financial adviser union-inspired disruption. Indeed, pensions could be some union union-inspired disruption. Indeed, pensions could be some union Related Partners eaders’ personal and professional Alamo, their influence having been eaders’ personal and professional Alamo, their influence having been Telegraph Retireme ong on the wane. Telegraph Retireme ong on the wane. Services Services Consequently, Lord Hutton is likely to recommend the continuation of a In finance form of defined benefit (DB) provision, albeit watered down and with In finance form of defined benefit (DB) provision, albeit watered down and with higher employee contributions. But implementation of such a recommendation would fail to fulfil the most fundamental of Lord Hutton’s own criteria; it would not be sustainable.

Friday, March 4, 2011

Did anyone out there anticipate that 2011 would be such a wild year? The year is barely over two months old and we have already seen multiple civil wars erupt, rumors of more wars all over the mainstream media (potentially even including the United States), riots and revolutions breaking out mainstream media (potentially even including the United States), riots and revolutions breaking out all over the globe, oil prices soaring into the stratosphere and chaos on global financial markets So why is all of this happening? Is all of this one big coincidence or is there a reason why we are witnessing such global chaos right now? Is it just coincidence that revolutions have broken out in over a dozen countries in the Middle East all at the same time? Is it just a coincidence that globa prices for oil, food and precious metals are all skyrocketing? Is it just a coincidence that world financial markets suddenly seem more vulnerable than at any time since 2008? Looking at what is t. Unfortunately, this "perfect storm" is very likely to plunge the global economy into yet another it. Unfortunately, this "perfect storm" is very likely to plunge the global economy into yet another financial collapse if it continues to get even worse

It doesn’t seem to matter how much house cleaning voters do in the legislature; year after year, the corruption gets worse.

Citizens for Responsibility and Ethics in Washington (CREW) has released its report on the “most corrupt” politicians for 2010. Not surprisingly, Rep. Maxine Waters (D-CA) and Rep. Charlie Rangel (D-NY) make the list. Waters stands accused of obtaining millions in TARP money for the bank OneUnited, on whose board her husband once sat, and in which he owned more than $350,000 in stock. Yet even as Rep. Waters awaits trial for her offenses, voters in California’s 35th District keep sending her back to Washington. She’s currently serving her tenth term.

Rep. Charlie Rangel (D-NY) makes the list after being formally censured last December for “financial misconduct” that includes “misleading” financial disclosures and failing to pay property taxes. He also took corporate-paid trips to the Caribbean and traded legislative access for donations to his Rangel Center at City College.

Rep. Jesse Jackson, Jr. (D-IL) currently enjoys his eighth term in Congress in spite of investigations that he allegedly agreed to raise money for former Illinois Gov. Rod Blagojevich in exchange for Barack Obama’s old Senate seat.

Drunk with power, arrogantly self-serving, and full of hubris, America’s legislators in both parties seem as corrupt and unethical as ever. Two-term Alaskan Senator Lisa Murkowski (R) makes the list for “purchasing land in Alaska for a price below market value, accepting a mortgage on terms not available to the general public, and for failing to accurately disclose the transaction.” Senator David Vitter (R-LA) is only in his first term but that didn’t stop him from soliciting prostitutes via the “D.C. Madam,” not surprising since Vitter was also apparently a long-time customer of Jeanette Maier, the “Canal Street Madam.”

Thursday, March 3, 2011

I love Foursquare and continue to have very high hopes for the location-based check-in space. I think one of the key things to look forward to is when these services (Foursquare Gowalla, SCVNGR and of course, Facebook Places) are integrated with business POS (point of sale) systems. The idea being that businesses would know we were checked-in, in real-time, and be ABLE TO DO SOMETHING ABOUT IT, based on our past buying history is one of the most significant things we can all look forward to. That’s when marketing and conversions become relevant and pointed in the LBS space. But until then, there is something else that’s been eating away at me as I’ve thought about Foursquare and similar services.

Wednesday, March 2, 2011

Earlier this month, J.P. Morgan made an important announcement that received scant coverage in the media: the bank would now accept gold as collateral for loans. The move appears to have been well-timed, for in the ensuing weeks, the price of gold and silver climbed steeply, based largely on political turmoil in the Middle East. But why should Morgan's decision be of interest to anyone outside the bank?

It can be argued that J.P. Morgan is the world's premier major bank. As such, its decision to accept gold as collateral offers a rare glimpse into the very private financial decision-making of some of the largest and most sophisticated investors in the world, whether governments, corporations, or wealthy individuals.

By reopening its former gold vaults in New York, as well as new facilities in Far Eastern financial centers - which cater to investors who typically have larger gold reserves than Western counterparts - Morgan is telling the world that gold is gaining greater traction as a medium of exchange.

Given that a bank continually looks to provide services that its clients demand, the move suggests that a strategy has taken hold among the highest echelon of investors based on core holdings of precious metals.

Tuesday, March 1, 2011

He laid the blame for the financia crisis, the bailout and subsequent austerity cuts directly on banks in testimony to the House of Commons Treasury Select Committee on Tuesday."Now is the period when the cost is being paid. I'm surprised the real anger hasn't been greater than it has," Mr King said, referring the harsh cuts being ntroduced by the government to slash the massive debts created by the financial crisis. The governor and other senior central bank officials were being questioned on financial regulation and the inflation report.

Americans love a revolution. Their own great nation having been founded by a revolutionary declaration and forged by a revolutionary war, they instinctively side with revolutionaries in other lands, no matter how different their circumstances, no matter how disastrous the outcomes. This chronic reluctance to learn from history could carry a very heavy price tag if the revolutionary wave currently sweeping across North Africa and the Middle East breaks with the same shattering impact as most revolutionary waves. Benjamin Franklin and Thomas Jefferson hailed the French Revolution. “The French have served an apprenticeship to Liberty in this country,” wrote the former, “and now… they have set up for themselves.” Jefferson even defended the Jacobins, architects of the bloody Reign of Terror. “The liberty of the whole earth was depending on the issue of the contest,” he wrote in 1793, “and was ever such a prize won with so little innocent blood? … Rather than [the revolution] should have failed, I would have seen half the earth desolated.” In Ten Days That Shook the World, the journalist John Reed was equally enthusiastic about the Russian Revolution of 1917, a book for which Lenin himself (“great Lenin” to Reed) wrote an enthusiastic preface. Reed’s counterpart in China’s communist revolution was Edgar Snow, whose characterization of Mao—“He had the simplicity and naturalness of the Chinese peasant, with a lively sense of humor and a love of rustic laughter”—today freezes the blood.

China, the biggest buyer of U.S. Treasury securities, owns a lot more than previously estimated. In an annual revision of the figures, the Treasury Department said Monday that China's holdings totaled $1.16 trillion at the end of December. That was an increase of 30 percent from an estimate the government made two weeks ago The government made the change to its monthly report based on more accurate information it obtains in an annual survey. That survey does a better job of determining the actual owners of Treasury securities. China was firmly in the top spot as the largest foreign holder of U.S. Treasury debt even before the revisions. But the big increase in Chinese holdings could ease fears that Chinese investors might begin dumping their U.S. holdings. Such a development could send U.S. interest rates rising That would slow America's economic recovery and ncrease Washington's costs for financing the $14.3 trillion national debt.